Archive Article: 1997/09/20
OPERATING refurbished machinery can cut the cost of replacement and depreciation, boost harvesting capacity and help reduce reliance on contractors.
So goes the sales message, but does it work in practice and do the figures add up?
According to ADAS mechanisation consultant, John Bailey, it does for sugar beet growers. For many of them it is difficult to justify buying a new harvesting kit when contractors charges for lifting and carting the crop average around £148/ha (£60/acre).
"It is hard for even the largest farms using their own machinery and labour to match that figure," he says. "A realistic cost for operating ones own equipment and staff is £75 an acre and often more.
"The problem on the majority of farms is the limited amount of work available for the harvester accompanied by a short-term labour requirement of up to four people.
"Smaller trailers on farms means more tractors and drivers, pushing costs higher and making maintenance and depreciation even more disproportionate to the annual acreage harvested."
Mr Bailey points out that by offering a specialist service across an extended acreage, contractors can keep costs down while continuing to invest in modern high performance machines able to do a fast and effective job for their customers.
"By using a contractor, the job ought also to be completed sooner enabling the ground to be put back into cereals quicker. However, farmers must be sure that their staff are gainfully employed while the contractor is at work. One answer could be an arrangement where they drive for the contractor."
One drawback with a contract operation is when sugar beet tops are to be fed to sheep. Unless the team is prepared to stagger its fieldwork, speed of operation may be simply too fast for the flock.
Despite the economic and logistical disadvantages of "do it yourself" harvesting, British Sugar says that only half the national crop is lifted by contractors, with many farmers preferring to retain control over the operation. Noting this, Standen Engineering is reintroducing this year its refurbishment scheme for sugar beet harvesters.
The company says that it is increasingly difficult for smaller-acreage growers to justify the cost of financing a new sugar beet harvester costing £35,000 and upwards.
On an advance of £35,000, finance repayments over five years at current interest rates will be in the region of £8,750 per annum, while even a seven year term will cost almost £7,000 a year. Taken over 100 acres, this equates to £70 an acre or 20% more a year than a contractor would charge and one still has to physically lift and cart the crop.
The figures become more favourable when considering refurbished equipment. According to Standens Andy Bone, the price for a complete factory refurbishment including a years warranty should be less than half that of a new machine.
"Sugar beet harvesters take a real beating and depreciate very quickly," he comments. "Provided growers accept that they are not getting the latest model, then a refurbished machine can make good economic sense compared with buying new.
"We plan to offer a menu of harvester rebuild and component replacement options to suit different requirements and pockets. The top level will see the machine totally stripped down, shotblasted, repainted and rebuilt using all new parts as necessary."
Standens sugar beet harvester refurbishment scheme complements a similar service already available on potato harvesters. This, says Mr Bone, is proving popular due to the high grower demand for own-use machines.
"There are far fewer contractors offering a potato harvesting service due to the sensitivity of the crop," he points out. "The majority of growers prefer to control every aspect of the operation from de-stoning to grading."
Mr Bailey agrees, adding that a good case can be made for buying a competently refurbished machine instead of new on an enterprise growing 60 to 100 acres a year. "With pressure increasing on margins, a sound, rebuilt harvester with a warranty merits serious consideration as a way of reducing costs," he says.
An important point to consider is the ability of the chosen machine to harvest the crop at a good work-rate with minimal damage.
Although machine design, reliability and performance have improved steadily over the past 10 years, it is still necessary to make sure that the refurbished machine is able to meet the required maximum damage limits and is supported by the supply dealer or manufacturer.
Because potato harvesters are not subjected to the same wear and tear as other harvesting machinery, a five year old refurbished machine with warranty can make a good buy at a price up to 50% less than the equivalent new model.
The strength of its extended warranty is a factor which APH says has helped it become the largest specialist supplier of refurbished combines in the UK. Concentrating on the New Holland 8000 series, the company supplies completely rebuilt combines at prices considerably lower than current new models.
Chairman, Stephen Allen, says that although it may not have all the sophisticated features or throughput of a new machine, an APH rebuild offers growers guaranteed reliability and performance at much lower cost.
Hired or purchased as a farms only machine or as support for another combine, APH rebuilds are a valuable option to farmers wishing to replace an existing combine with newer, more reliable model.
All machines leaving the companys workshops have a standard 12 month warranty and this can be extended for a further four years with the APH Harvestcare scheme.
Costing between £600 and £800 per year, depending on combine model, the insurance-backed warranty covers all major components in the event of failure or breakdown. The cost includes an annual out-of-season checkover and the supply of a replacement machine if APH is unable within 24 hours to repair the combine or replace any of the components covered by the warranty.
Mr Bailey says that a refurbished combine is likely to prove a practical alternative to a new machine on many farms.
"One needs to look at the outlay in direct relationship to the acreage to be covered," he says. "Total combining costs must be kept at or below £25 an acre if a profit is to be made at a time of low grain prices. Local contractor charges will provide a useful guideline."